NSC urges return of budget link between economy and aid
Dutch companies must not suffer from Europe's protectionism
The Netherlands Scientific Council for Government Policy (WRR) has called for a closer link between economic policy and development aid. Aid policy should focus more on promoting economic growth and less on poverty reduction. In this way, The Hague can better promote its interests in Europe. This is stated in a report published by the advisory body on Monday. The report was requested by the Ministry of Foreign Affairs.
'Stop idealistic aid'
The WRR is critical of the current Dutch aid policy, which is mainly aimed at reducing poverty. According to the Council, this has led to a situation in which Dutch companies lag behind foreign competitors in developing countries. The report states: 'The current aid policy hurts the Dutch economy. The government gives aid to countries to buy tractors from the Netherlands, but due to their lack of knowledge and economic development, those countries end up buying them from Germany'.
The WRR therefore wants the government to take a different approach to aid policy. Aid should be linked to economic growth and not just poverty reduction. The advisory body also believes that the government should provide more support to Dutch companies that want to do business in developing countries.
Return of budget link
The WRR also calls for the reintroduction of the budget link between economic policy and development aid. This link was severed in 2010 by the then Minister for Development Cooperation Bert Koenders (PvdA). As a result, the budget for aid is no longer automatically linked to the Dutch gross national income (GNI). The WRR believes that this was a mistake. The advisory body argues that the budget link ensures that aid policy is more predictable and stable. In addition, the link would make it more difficult for the government to cut aid in times of economic crisis.
Follow the example of Germany
According to the WRR, the Netherlands should follow the example of Germany. In Germany, aid policy is closely linked to economic policy. As a result, German companies are very successful in developing countries. The WRR: 'The Netherlands must stop its idealistic aid policy and follow the German example. Only then can we ensure that Dutch companies can compete with foreign competitors'.
The Ministry of Foreign Affairs has not yet responded to the report.
